Sports|In Fine Print of $25 Billion Offer, a Bid for a Stake in FIFA’s Business

Advertisement

Supported by

In Fine Print of $25 Billion Offer, a Bid for a Stake in FIFA’s Business

Image

The SoftBank Group chief executive Masayoshi Son has set his sights on investing in two major new soccer tournaments in what would amount to a near takeover of much of FIFA’s business.CreditCreditAlessandro Di Ciommo/Getty Images

KIEV, Ukraine — Masayoshi Son is Japan’s richest man, and one of the world’s most prolific dealmakers, and for the past few months he has been looking to add another jewel to his sprawling sports portfolio: FIFA.

For months, a consortium led by SoftBank, the Japanese conglomerate owned by Son, and the leadership of soccer’s governing body have been in negotiations over a proposed $25 billion deal for two new tournaments. The talks are shrouded in nondisclosure agreements. But according to information reviewed by The New York Times this week, the terms of the proposal call for Son to play a major role in the new joint venture, FIFA Digital Corp., and for the consortium to take over some of FIFA’s most valuable operations.

According to the proposed terms, FIFA would be a 51 percent partner in the new joint venture. The consortium, which includes SoftBank’s British subsidiary SB Investment Advisers and Centricus Partners, a London-based asset management firm, as well as Arab and American investors, also is seeking to control the rights to FIFA’s gaming and merchandise businesses. That include the soccer body’s $150 million-a-year deal with EA Sports for the popular FIFA video game, which is among its most lucrative. Son and FIFA’s president, Gianni Infantino, would serve as the co-chairmen of a 10-member supervisory board of FIFA Digital, with each appointing half the board’s members.

Son’s biggest challenge, though, is that he is seeking to acquire a multibillion-dollar stake in a governing body that many executives at the top levels of soccer say should not be for sale.

Aleksander Ceferin, the president of Europe’s soccer confederation, UEFA, on Wednesday publicly criticized the mere idea behind the proposal at a meeting with European Union lawmakers in Brussels on Wednesday.

“I cannot accept that some people, some of our colleagues who are blinded by the pursuit of profit, are considering to sell the soul of football tournaments to nebulous private funds,” Ceferin said without naming Infantino or any other FIFA executive. “We are not the owners of football. We are not allowed to sell it.”

For Son, who has an estimated net worth of $20 billion, FIFA is just the latest target in what has been a dizzying spending spree. Since last year, when Son convinced investors from Saudi Arabia and the United Arab Emirates to create the $93 billion Vision Fund, the technology fund has spent $40 billion to amass stakes in 24 companies. Son’s investments include stakes in the ride-hailing companies Uber and China’s Didi Chuxing, but also internet companies, hotel groups and even a nine-figure investment in an on-demand dog-walking app.

Partnering with FIFA doesn’t appear to fit the fund’s typical investment profile. But in the months since Son convinced Saudi Arabia’s Crown Prince Mohammed bin Salman to invest $45 billion in the Vision Fund, Saudi Arabia has launched a mission to become a major player in global sport.

SoftBank has declined multiple requests for comment about its soccer plans. And FIFA, citing a nondisclosure agreement, has resisted naming the investment group beyond describing them as “solid and serious.”

The groups have been discussing the creation of a biennial world league for national teams as well as a quadrennial tournament for 24 clubs similar to the World Cup. That tournament would replace FIFA’s annual Club World Cup, but would require significant changes to the FIFA calendar and could harm the lucrative Champions League that UEFA runs.

The fund has offered to partner with FIFA on the new events for 12 years, proposing to guarantee $2 billion for each edition of the national team competition and $3 billion for each Club World Cup. Infantino sought their permission to conclude talks with the group in March, but was blocked by members of FIFA’s governing council. At the time, he said he had only a 60-day deadline to complete a deal.

That deadline has passed, and the consortium has granted an extension, but hard feelings remain over the way the offer was proposed. Infantino had hoped to persuade board members to reconsider it at an emergency meeting he planned to hold at FIFA’s Zurich headquarters next week, but he was forced to scrap those plans amid opposition from several members, including some outside Europe.

FIFA officials now say further talks will not be held until after the conclusion of the World Cup on July 15. Before the tournament, FIFA members are scheduled to vote on whether to award the 2026 World Cup to a joint bid from North America or one from Morocco.

Still, Infantino in recent weeks tried to win support for the SoftBank-led proposal from some of the world’s top clubs at a private meeting in Zurich. There, executives from seven wealthy clubs were told they could receive as much as $100 million per tournament appearance. After the meeting, executives from Barcelona and Real Madrid expressed support for the plan, while the perennial Italian champions Juventus expressed concern.

“FIFA should be a governing body about good practices, not about entering commercial joint ventures with unknown investors,” the Juventus chairman Andrea Agnelli told The Guardian on Wednesday. Agnelli and Ceferin were in Kiev for a meeting of UEFA’s governing executives on Thursday, two days before Liverpool and Real Madrid are to meet here in the Champions League final.

Son is hardly a sports novice. He backed an America’s Cup yacht last year and has invested in the Fukuoka SoftBank Hawks baseball team in Japan, as well as a Major League Soccer expansion franchise in Miami in partnership with the former England captain David Beckham.

In addition to UEFA opposition, Son and Infantino also must find a way out of existing agreements that stretch beyond the start date for the proposed new partnership in 2020. For example, the Japanese marketing company Dentsu has rights to an existing version of the Club World Cup through 2022, and the right of first negotiation in 2023 and 2026. Adidas, Coca-Cola and the Chinese conglomerate Dalian Wanda have sponsorship deals through 2030.

But Son is known for spending above market value for assets he wants. Softbank’s offer to FIFA, for example, exceeds the organization’s own analysis of what its tournaments are worth. According to an internal report, the 24-team Club World Cup could generate at best $1 billion for each edition, or about one-third the amount SoftBank and its partners have guaranteed.

Despite the billions being offered, Lars-Christer Olsson, the leader of an organization representing European Leagues, said he was bothered by sovereign governments’ using their money to invest in sports.

“Sports should stand aside from political systems because otherwise it will not be credible,” he said. “I’m very critical of any involvement of state subsidies to get a position in sports. I think that’s dangerous for the sport itself.”

The Saudi Arabia’s General Sports Authority has not responded to requests for comment.

A version of this article appears in print on , Section D, Page 3 of the New York edition with the headline: In Fine Print of a $25 Billion Offer, A Bid for a Stake in FIFA’s Business. Order Reprints | Today’s Paper | Subscribe